Morningstar DBRS and Scope Ratings in Favour of Cyprus

Morningstar DBRS recently upgraded Cyprus’ long-term credit rating to positive, citing budget surpluses of 2.7% of GDP in 2022 and 3.1% in 2023, following pandemic deficits.

In accordance with the agency Morningstar DBRS, Cyprus has seen strong revenue growth, mainly from social security contributions and corporate income tax, driving its improved fiscal performance.

Accordingly, public revenues surged due to economic recovery and strong employment growth, exceeding the rise in public spending.

In addition, Corporate tax revenues grew fuelled by foreign companies, particularly in the technology sector, relocating to Cyprus. The latter point is very interesting showing that Cyprus has strongly established itself as a destination for technology companies.

Further, the country’s social security system has strengthened with increased contributors and rising contribution rates, ensuring long-term financial stability.

Along the same line, Scope Ratings Agency also announced on 25 October 2024 that Scope upgraded the Republic of Cyprus’ long-term credit ratings to A-; Outlook Stable.

The driving force behind Scope’s upgrade was a strong fiscal outlook, robust economic growth, and a reduction in financial system risks.

In our opinion, these ratings show a favourable outlook and the strong resilience of the Cyprus economy.